Many businesses that sell goods and/or services sell such goods and/or services on credit. One such business would be a telecommunications service provider. When offering credit, it is a good business practice to determine the risk associated with offering that credit and balance it against the potential profit from the sale for which the credit was offered. This balancing process is often used to generate a credit limit for a particular customer. This process can be an involved and time-consuming process and tends to slow down the conduct of business.
Generally, in most large companies the information needed for credit decisions is spread out all over the company. The necessary communications between various departments within a company, such as the sales, credit and finance departments, can be very time consuming. For instance, the sales, credit and finance departments may need to collaborate on what is the risk associated with offering credit, what is the potential profit, and whether or not accepting the deal is worth the risk. Outside services, like Dunn & Bradstreet, may also help to some extent at determining the risk by offering outside credit scoring. However, such services do not completely address the problem, as each company has its own view of a risk/benefit analysis.
The process of credit management typically consists of interactions between the credit department, the sales department, the finance department and one or more credit information providers. Typically, when a new sales order or service contract is prepared, the sales department and credit department need to interact. The credit department can then check the credit limit of the customer. If the customer credit limit has not been established internally, the contract can be blocked which involves communication with the sales department. Then the customer credit fact sheet is checked in the credit department. The credit department can then interact with the outside credit information provider to get external credit information, such as a credit scoring. This credit scoring can then be used along with other information to establish an internal credit scoring of the customer and, based on this, a credit limit. The sales order can than be released back to the sales department for execution.
Embodiments consistent with the present invention relate to automated credit management systems and methods for managing credit information in an automated fashion. Automated credit management systems consistent with the present invention may include a credit information manager, a credit limit manager, credit decision support and a credit rules engine.
Automating the credit decision can help companies and other entities speed up the credit process and improve the consistency and efficiency of a credit operation. However, such an automated process must be flexible enough to meet the demands of different businesses.
Thus, a need exists for an automated credit management system that is flexible enough to meet the changing needs of different businesses.
It is accordingly an object of the present invention to automate and manage the credit process.
In one embodiment, this is achieved by communicating with external credit information provider systems, gathering information, and applying rules to the information in order to calculate and manage the credit information.